Monument Collaborates with Midnight to Tokenise Retail Deposits
Monument, a UK digital bank catering to mass-affluent customers, is partnering with blockchain infrastructure provider Midnight to tokenise retail deposits. This collaboration aims to enhance access to new investment products for customers.
Under the agreement, Monument’s clients will be able to hold interest-bearing deposits as digital tokens on Midnight’s network. Importantly, deposits will continue to be held at Monument and will be safeguarded by existing UK financial protections. This initiative marks a significant step toward offering a broader array of tokenised investment and lending products to retail clientele via the bank’s platform.
The bank has set an ambitious target of £250 million in tokenised deposits during the initial phase of this rollout. Each token will correspond directly to funds held at Monument, essentially serving as a digital representation of a traditional deposit, rather than a separate asset. These deposits will remain redeemable in pounds sterling and protected under the Financial Services Compensation Scheme.
The project leverages infrastructure developed by the Midnight Foundation, enabling users to access blockchain functionalities without the need to manage digital assets directly. Monument envisions a long-term integrated offering that encompasses savings, investments, and borrowing capabilities within its app environment.
Phased Rollout Strategy
The rollout will occur in three distinct phases. The first phase will focus on converting customer deposits into tokenised representations on Midnight’s network. The subsequent phase will introduce tokenised investment products, including those linked to real-world assets, managed by global asset managers. The final phase is anticipated to include Lombard-style lending, permitting customers to borrow against investments maintained within the app.
A key aspect of the partnership is the privacy features inherent in Midnight’s infrastructure, as transaction data will only be accessible to the bank and its clients. This method is designed to align blockchain-based products with the confidentiality and control standards demanded by regulated financial services.
The announcement comes at a time of growing interest in tokenised financial infrastructure, particularly related to settlement, collateral management, and accessibility of private market assets. Monument’s approach seeks to distinguish itself from existing tokenisation initiatives by focusing on retail banking customers, rather than institutional entities.
Commitment to Scalable Banking Solutions
Mintoo Bhandari, founder of Monument Bank, expressed that the bank was established to deliver innovative and valuable financial services promptly and safely to the often-ignored mass-affluent segment in the UK and beyond. The collaboration with the Midnight Foundation is a testament to their ongoing commitment to that mission. Bhandari conveyed confidence in Midnight’s capability to provide the necessary blockchain infrastructure while preserving essential confidentiality for efficient, scalable modern banking.
Ian Rand, CEO of Monument, echoed this sentiment, noting the potential of combining innovative capabilities with a client-centric service model within the framework of regulated UK banking. He emphasized the excitement around offering services that empower clients in managing and enhancing their financial well-being.
Balancing Transparency and Privacy in Financial Products
According to Fahmi Syed, president of the Midnight Foundation, financial institutions globally are investigating how blockchain infrastructure can facilitate regulated financial products. A persistent challenge, however, is achieving a balance between transparency and the privacy needs of modern banking practices.
Syed highlighted that Midnight provides programmable privacy infrastructure that enables financial institutions to represent assets on public networks while safeguarding transaction data and sensitive financial information. Monument’s initiative exemplifies how regulated banks can successfully transition traditional financial products onto a permissionless blockchain like Midnight, aligning with existing compliance, disclosure, and consumer protection norms.
Ultimately, Monument aims to lay a solid foundation for a more extensive range of tokenised financial products tailored to retail customers.